Journal of Banking & Finance Vol. 35 No. 12 2011
On the acquisition of equity carve-outs
Abstract
We examine the role played by the parent’s motive in undertaking a carve-out; the parent’s post-IPO influence over the carved-out subsidiary; and anti-takeover provisions and industry structure of a carve-out on its acquisition likelihood and its acquisition premium. We find that the probability and hazard of a carve-out acquisition increase when the parent’s objective is to unlock the value of a subsidiary and when the parent and the subsidiary are tied with a product-market relationship. We also find that the post-IPO parent ownership significantly affects the acquisition likelihood and the level of acquisition premium. Additional analyses examining the post-IPO carve-out status suggest that the product-market relationship and post-IPO parent ownership increase the probability of re-acquisition.
- DOI
- 10.1016/j.jbankfin.2011.05.021
- Volume
- 35
- Issue
- 12
- Pages
- 3432-3449
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib